Opinions expressed by Entrepreneur contributors are their own.

Key Takeaways

Financial statements are a dashboard that flags problems while you still have time to fix them, not a report card on a month that’s already over.

The balance sheet, not the income statement, tells you how strong your business has actually become.

Every number should prompt a question about why it changed and what to do next.

In my career, I’ve had the privilege of working alongside more than 3,500 entrepreneurs, and I’ve noticed an interesting pattern. Two business owners can look at the exact same financial statements and walk away with completely different conclusions. One sees paperwork. The other sees strategy.

Most entrepreneurs weren’t taught how to read financial statements beyond revenue, profit and the balance in the bank account. That’s understandable. You started your business because you believed in a product, a service or a mission.…